Padgett Stratemann is now RMSAs San Antonio becomes a bigger player in Texas Business, more national firms are entering this market. A national firm does not start from zero. RMS (http://rsmus.com/) purchased Padgett. This gives the buyer a large client base to start with. Typically the local partners have made a handsome profit on their time at the firm. But seeking to recoup the investment, the buyer typically raises fees knowing some business will be lost. RMS has re located from North Loop 410 to 1604 and 281. Renee Foshee, a tax expert with the firm, is the current SA CPA Society President.

Turner Cleveland PCTerry Cleveland has addressed our students. Two of our graduates are employed with at this firm.

Ridout Barrett CPAsTony Ridout has visited and addressed our students many times. We have placed graduates with Ridout for several years.

Financial Consulting Firms

Aventine Hill Partners, Inc.Beth Hair CEO founded Aventine in San Antonio in 2009. The firm now has offices in Dallas, Austin, San Antonio, and Houston. She formerly was with RGP.

Resource Global ProfessionalsSusan Hough has been to campus and spoken to our students. She is the San Antonio Manager of RGP. RGP and Aventine are not CPA firms. Instead they offer contract specialists for firms needing specific tasks such as compliance or Controllerships.

Accounting Information

Acounting Today This is an independent site for accounting news regarding firms and current issues.

Accounting Certifications

Certified Information Systems Auditor CISANow that everything is literally on the computer and cyber security becomes a prominent issue, I see more and more accounting professionals with this designation. Previously known as the Information Systems and Audit Control Association, it now goes by the acronym ISACA.

Geo Politics

Institute for the Study of WarThe Institute for the Study of War advances an informed understanding of military affairs through reliable research, trusted analysis, and innovative education. We are committed to improving the nation’s ability to execute military operations and respond to emerging threats in order to achieve U.S. strategic objectives. ISW is a non-partisan, non-profit, public policy research organization.

StratforThis Austin, TX based site was begun by an ex Texas State Professor.

Our two-day workshop provides the practicing professional with the expertise and knowledge they need to excel in their roles as a preparers or reviewers of SEC filings. Participants will learn the rules of the road, explore the filing requirements and required forms (e.g., 10-k, 10-Q, 8-K, etc.), discover disclosure best practices, and gain insight from experience SEC reporting professionals.

This workshop is geared toward the practicing professional directly or indirectly responsible for SEC reporting within an organization. If you are a CFO, controller, assistant controller, SEC reporting manager or other professionals wanting to learn more about SEC reporting, this two-day workshop is intended to give you the foundation you’ll need to succeed in your current role.

A US –United Kingdom trade deal may never be easier to strike than right now.

The WSJ again, but why penalize Mexican made Fords and not British made Jaguars and Range Rovers?

Trump has some good ideas in approving the Keystone Pipeline construction and re starting the Dakota Pipeline. But his ideas on Mexican trade are the failed ideas which have been tried before. Mexican President Nieto cancelled a planned Washington DC trip on trade after a bitter Twitter exchange with Trump. Yet Trump meets with British Prime Minister Theresa May today to negotiate a trade deal! Or as P J O’Rourke titles his new book, What the H___ is going on Here?

Trump, well make that President Trump, complains that the US has a $60 Billion trade deficit with Mexico. This means we buy more from them than Mexico buys from us. Well, yes, and perhaps Trump should dust off those Wharton School of Business lectures;he sure likes to brag about the degree. But where is the learning?

If two nations produce very different kinds of goods, there is a reasonable chance for balanced trade. Consider say Japan and Chile. Chile produces vegetable and fruit which cannot be grown in Japan. Japan produces economical light trucks which are useful in a developing country like Chile. So the two trade with one another on a somewhat equal basis.

Mexico produces vehicles for a variety of companies, notably Nissan and VW but now Ford and GM as well. As those cars can be assembled for less cost in Mexico than in Michigan, production gravitates to its lower cost provider. So of course we have a trade deficit with Mexico!

Elsewhere in today’s WSJ, some bone headed economists suggest NAFTA has not had that much impact on the US Economy. Obviously these guys have not visited Laredo, one of the biggest trade ports in the US now, or tried to navigate I-35 between Laredo and DFW.

Trump now threatens (promises?) a 20% import tax on goods made in Mexico to finance his Wall on the Border. This idea has been tried before, with disastrous results. And interestingly it surfaced at about the same time in the markets.

The Smoot-Hawley Tariff Act of 1930 was signed into law June 17, 1930. The tariffs (import duties on foreign goods) were the highest in 100 years. Trading partners retaliated slowing trade, and job growth, both places. Exports and imports were cut by half, lengthening the Depression. The idea then was to ‘protect’ famers as land had been freed up from grazing livestock as America embraced the automobile.

Now consider the timing of the planning. During his 1928 campaign, Hoover promised to ‘help’ farmers by raising import duties on agriculture products. The thinking was that this sort of trade protectionism would lower imports and raise the market for US agriculture products.

The House passed a version of the bill on May 1, 1929. Smoot and Hawley by the way were both Republicans as was Hoover. The Senate bill passed in March 1930, 44 to 42. My point is that the House version passed six months before the market crashed. No doubt in a misguided attempt to help, the Senate passed its bill just as the markets had risen 50% and began its historic dive to Dow 41. My point is that this same bad idea is being floated just at the US DJIA has hit 20,00, a new record now as then in the markets. This is a remarkable similarity, decades apart.

All of this really began back in the 1970. Japan became the leader in motorcycles and then small cars using motorcycle engine technology. Instead of meeting the competition (such as making AM FM radios standard equipment in US cars) the automakers fought with tariffs then as well. It did not work.

The fact of the matter is that modern production techniques are such that is it just not economical to pay someone $25 an hour to assemble a washing machine or air conditioner. Those workers need more sophisticated jobs. And so Mexico moves to where the US was after WW II with a growing manufacturing economy. Worker wages in Mexico have grown in some cases 8x in the twenty years since NAFTA passed. In the 1980s Monterey was a sleepy town, to day you can go to the opera there.

The far better idea would be a powerful NAFTA from Vera Cruz to Montreal. That would create a North America which was finally energy independent from the precarious Middle East. And trade would flourish.

Sorry, but Mr. Trump cannot dictate growth by fiat any more than Hugo Chavez could in Venezuela.

January 25, 2017

is the topic of the book review of When Crime Pays in today's WSJ, page A 15.

The book focuses on rascals elected in the world's largest Democracy, India. One politician threatened to 'feed those who cross him to the crocodiles' making most of

Trump's threats look pretty tame.

The belief is that when the government fails to provide services, someone will step in to capitalize on that failure. I recently watched Excobar Paradise Lost.

He built medical facilities and swimming pools and such and promoted himself to Colombians on that basis. Of course once he agreed to a prison term, he had everyone killed who m ight remotely tell the authorities more dirt on him.

But my point here is that on Wednesday the WSJ has a long book review. One can learn a good deal reading such reviews as well as

January 22, 2017

I introduced the topic of social mood in class this week. And this weekend I have an interesting post about The New Civil War comparing the map with the Right to Work Map, guess what they are the same.

So here is the post from http://www.themarketperspective.com this weekend.

Weekend January 22, 2017

Cycles

My apologies for getting too bearish too soon. The high in the Transports back in Fall, 2014 went before a final low in multiple indexes this last February 2016. That led to multiple highs

across many indexes which is occurring, and probably peaking now. Let's look at the confluence of cycles now coming together.

40 Year cycle from 1974 Low to present High

17 Year Cycle from January 200 to right now, a remarkable timely occurrence

14 Year Cycle from 1988, 2002, 2016

10 Year 1997-2007-2017

And 66 week, 33 week, and a 5 month Jan 2016 June 2016 Nov 2016 with the next half of that cycle occurring now

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Gann also warned about the seventh year of a stock market and the danger there in, consider 1987, 1997, 2007

So I am expecting a high in the stock markets now followed by ups and downs the rest of the year. We shall see if the previous Nov 2016 low holds

Social Mood

We techies like to say there is always a fundamental event to validate the technicals. And wow we have a bunch on the table.

Negative mood results in a throw the bums out attitude and that is now just in the US but world wide.

Cameron out as British PM on the Brexit vote.

Hollande not running for re election he is so far down in French polls. Right wing French politicians also calling for an exit from the EU. See the move from left socialist, to right in France.

Like him or not, everyone from Rush to the political left agrees that Trump has no particular ideology. Instead he sees the world in terms of winners and losers. It is not that he embraces Putin's policies,he just sees Putin as a winner in Russia versus our loser list above.

And like a pugnacious 13 year old, Trump feels compelled to answer every real or imagined insult with a Tweet. Yesterday his press secretary was excoriating the press for suggesting his inaugural turnout was lower than Obamas, I mean who cares, is that the PR Hill to die on the first day?

But my point is that he openly has declared the press unfair to him, )as though the declaration would change their mind), and that he will continue tweeting to get his message across. In his column last Thursday Karl Rove explained the danger of such 140 character comments on national and international policy. But what we need to grasp is that this sort of action will probably be cited as careening markets first one way and then the other this year. Polls indicate a majority of Americans have tired of the tweets but that won't change Donald.But the point is that Trump's tweeting to every imagined insult will just give encouragement to his supporters and more blood in the eye to his detractors. At the height of the Watergate frenzy, the press devoted thousands of lines of print to nothing but the crisis.The Trump Presidency is already shaping up the same way, consider his calling his own CIA a bunch of Nazis. Then yesterday he claimed more support than ever for the same CIA. This sort of flip flop will not help assure the markets.

It was interesting to watch the interviews with the crowd January 20. There were clearly many ordinary folks who had not attended before but were happy to stand for hours in the drizzling rain to see their guy. And he did not disappoint with his sixteen minute Change Starts Today speech.

The tone is further set by one third of the House Demcrats boycotting the event, so much for reaching across the aisle.

Conclusion-the political stage is now the most polarized since Nixon in 1972-the start of the 40 year cycle kicking in even back then.

Markets

Russell 2000

The RUT 2000 posted a stunning near 50% rally from the February lows. The PAR SAR has traced out five waves to the upside.

And this seems to qualify as a parabolic blow off. It will take a weekly close under 1200.67 to revers the pattern.

All indexes will peak at different times so as to throw off as many investors as possible.

Bonds

Wave A up and now a Wave B down, this market needs to turn back up this week to keep the idea alive of a counter trend bounce.

In my original article I showed the 1861 Civil War map, then the Right to Work map, and then the Red Blue Map. I pointed out they were all the same map.

The Southern States voted Red for Republican. Democrats were mostly isolated on the coasts and in the mid west, traditional union territory.

Now compare the above with the 2016 final election map

T

The Democrats lost all the South including Florida. And that Blue Wall of the mid-west gave way. If Trump had not fueded with the Republican Governor of New Mexico he might have done better there. But picking pointless fights is part of his brand.

And more states are joining the right to work movement, see this map and notice yep, just about the same as the 2016 election map.

So the trend has been for fewer Democrat victories amid the loss of over 1,000 Democrat seats since the Obama win inj 2008.

More states are voting right to work as RTW states gain more employers.

And non RTS states like Illinois CA New York CT continue to lose population to RTW states.

The trend is clear. And this is precisely why Trump won, te disconnect between Washington DC and the governed. Henninger noted the crime in Chicao and the ACA failure as the two big determinants of the failure of central planning.

Or as Betty Davis remarked in All About Eve, fasten your seat belt, it's going to be a bumpy ride.

dennislelam@gmail.com

The Market Perspective bases its information on techniques and sources that have been found to be reliable in the past, and The Market Perspective tries to base opinions on sound judgment and research, however, we do not guarantee that future results will match past performance and no guarantee can be made that advice will be profitable. The Market Perspective accepts no money for stock recommendations and is purely motivated by its own research in recommending any stocks. Put another way, the responsibility for decisions made from information contained in this letter lies solely with the individuals making those decisions. The editor and persons affiliated with The Market Perspective may at times have positions in securities mentioned. Nothing contained herein represents an offer to buy or sell securities. The Market Perspective encourages investors to be diversified, and to maintain sell stops and risk control over their valuable investment capital. No guarantee can be made to the accuracy of text or charts.